Dow Dips but Finishes Week Higher

NEW YORK ( TheStreet) -- Stocks finished lower Friday following a weaker-than-expected December jobs report and an adverse court ruling related to foreclosure liabilities that sank bank stocks.

The Dow Jones Industrial Average shed 23 points, or 0.2%, to close at 11,674. Earlier in the session, the bellwether index dipped as low as 11,599. The S&P 500 finished lower by 2 points, or 0.2%, at 1,271, and Nasdaq Composite slumped 6 points, or 0.2%, to settle at 2,703.

Still, the Dow managed to advance for the sixth consecutive week, starting the year with an 0.8% gain. The S&P 500 rose 1.1%, while the Nasdaq surged 1.9%. For the Dow, the rise was its biggest weekly advance since the week ended Dec. 3. It was also a good sign for the rest of 2011 as the Dow has finished in positive territory 74% of the time when it posts a gain for the first five trading days of the year.

Breadth was negative among blue chips Friday with 12 of the Dow's 30 components moving higher. Boeing ( BA), Merck ( MRK) and Pfizer ( PFE) were the biggest percentage gainers within the Dow.

Financials were dragging markets lower, with JPMorgan Chase ( JPM), Bank of America ( BAC) and Travelers ( TRV) among the worst performers on the Dow.

LPL Financial's Jeff Kleintop said a turn lower for equities was likely overdue. "The market is so overbought, up over both its 50-day and 200-day moving average. That can be sustained as long as momentum is strong. Momentum has stalled in the last few weeks, which means a pullback could be in store," he said.

The weakness in the banks was driven by news that Massachusetts' highest court had upheld a ruling that foreclosures enacted by two banks US Bancorp ( USB) and Wells Fargo ( WFC) were invalid because the banks failed to prove that they held the mortgage at the time of the foreclosure.

Wall Street is worried the decision may have a cascading effect on other court rulings on disputed foreclosures. Shares of U.S. Bancorp were down 0.8% to $26.09, while the stock of Wells Fargo shed 2% at $31.50.
Unemployment

The December jobs report was the most closely watched news for traders however and the data was mixed. The Labor Department said the U.S. economy added 103,000 jobs in December , falling short of the 150,000 additions that economists had been expecting, according to Briefing.com. The unemployment rate, however, fell to a better-than-expected rate of 9.4%, from 9.8%, previously, outpacing estimates for a December rate of 9.7%.

>>Unemployment Metric Lacking-Economists

"Overall the report fell short of expectations but when looked at from a two-to-three month perspective as opposed to a one-month report, it is generally positive," said Patrick O'Keefe of J.H. Cohn and a former deputy assistant secretary at Department of Labor. "The month to month was less robust but not severely so. It does confirm that the labor market is improving but at a sub-par rate."

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